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Intel: Strategic Decisions in Locating a New Assembly and Test Plant (B)

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Intel: Strategic Decisions in Locating a New Assembly and Test Plant (B)
In February 2006, Intel announced it had selected the Saigon Hi-Tech Park (SHTP) in Ho Chi Minh City as the site for its next assembly test (AT) plant. Recalled Brian Krzanich, Intel general manager Assembly Test: “From the first day we got there, it was ‘What can we do for you?’ They really wanted us, and we saw that in the park’s general manager we had someone who could get things done.” In February 2006, Vietnam’s Minister of Investment and Planning issued an investment license for Intel to build a $300 million AT facility; Intel later upped this investment to $1 billion.1
The Short List Runners-Up
Before settling on Vietnam, Intel discounted other locations for a variety of reasons.
In India, negotiations stalled when the team ran into an unexpected new round of negotiations with the federal government. “India wanted to be in the game,” Blain Trendler, manager, Global Site Selection and Development, noted, “but the politics were unclear.” The India location was tabled.
In Thailand, the sites were deemed too risky in terms of threat of natural disasters. Additionally, the team remained concerned about the government’s stability.
The site in Dalian, China, while attractive, did not match up to the incentives and grants provided in Vietnam.
Vietnam
In the end, the team decided on the Ho Chi Min City site for the new plant, and Intel was assigned a site in the SHTP. The team determined the SHTP to have a low national disaster risk, and it felt more westernized than Hanoi, according to Trendler.
The Vietnamese government, through the Ho Chi Min City mayor and the SHTP park manager, offered favorable grants along with long-term low rates for power and water, making the site attractive, including a separate grant assigned to a joint bank account

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